View metadata, citation and similar papers at core.ac.uk brought to you by CORE provided by Research Papers in Economics Agricultural Economics Report No. 194 October 1984 Economic Contribution of State Parks to the North Dakota Economy John F. Mittleider Jay A. Leitch Department of Agric North Dakota Agricultu North Dakota S Fargo, ND E PREFACE North Dakota's state parks are an important part of tourism which is an important component of the infrastructure supporting the state's economy. The purpose of this study was to estimate the contribution of state parks to the North Dakota economy in the form of increased levels of business activity, employment, personal income, and tax collections. The authors wish to express their appreciation to several individuals who made significant contributions to the successful completion of this study. Ms. Karen Assel, Project Coordinator in the North Dakota Parks and Recreation Department, was an unfailing source of information and inspiration throughout the course of this study. The authors also express their appreciation to state park personnel for dissemination and collection of the survey instrument and to the hundreds of park visitors who took time to complete the questionnaire. For their reviews of this manuscript, we wish to thank Tim Mueller, Randal Coon, Brenda Ekstrom, and F. Larry Leistritz. The financial support provided by the North Dakota Parks and Recreation Department and the North Dakota Agricultural Experiment Station has made this study possible. TABLE OF CONTENTS Page List of Tables . .. ....... .... ii List of Figures . ............. .. ...... 1ii Highlights .. .... ..... ... .. iii Purpose of Study . ................. .... 2 Analytical Procedures ...... ..... ........ 3 Economic Impact . .................. ......... 6 State Park Operation-and-Maintenance Expenditure Analysis ....... 7 State Park Visitors' Expenditure Analysis . ........ 7 Summary and Conclusions . .................. ...... 16 Appendix A: Impact and Flows of State Park Visitors' Expenditure Patterns 20 Appendix B: North Dakota Input-Output Model and Tax Revenue Estimating Equations. .......... 23 Appendix C: Questionnaire .......... ...... .34 Appendix D: Selected Characteristics of State Park Visitors ...... 39 LIST OF TABLES No. Page 1. Estimated Annual North Dakota State Park Visitors, 1971-1983 . .. 1 2. North Dakota State Park Survey Dates, by Season, Fiscal 1984 . ,. 4 3. North Dakota State Park Visitation Estimates, by Park and Month, Fiscal 1984 . ....... .. ... ........ 5 4. North Dakota State Park Survey Respondents, by Park and Month, Fiscal 1984 . 6 5. Estimated North Dakota State Park Operation-and-Maintenance Expenditures, by Economic Sector and Park, Fiscal Year 1984 . 8 6. Estimated Personal Income, Retail Sales, Gross Business Volume of All Business (Nonagricultural) Sectors, and Total Gross Business Volume, Resulting from State Park System Operation-and-Maintenance Expenditures, by Park, Fiscal Year 1984 . .. 9 7. Estimated Tax Revenues Resulting from North Dakota State Park Operation-and-Maintenance Expenditures, Fiscal Year 1984 . ..... 10 LIST OF TABLES No. Page 8. Estimated Direct and Secondary Employment Attributable to North Dakota State Park Operation-and-Maintenance Expenditures, Fiscal Year 1984 . 11 9. Average North Dakota State Park Visitors' Expenditures, per Person per Trip, by Park, Fiscal 1984 ....... .......... 12 10. State Park Visitors' Cost Categories and Corresponding Sector Delineation ........ ..... .. ........ .. 13 11. Estimated Expenditures by North Dakota State Park Visitors, per Person per Trip, by Economic Sector and Park, Fiscal 1984 . 13 12. Estimated Total Expenditures by North Dakota State Park Visitors, by Economic Sector and Park, Fiscal 1984 . ............. 14 13. Estimated Personal Income, Retail Sales, Gross Business Volume of All Business (Nonagricultural) Sectors, and Total Gross Business Volume, Resulting from State Park Visitors' Expenditures, by Park, North Dakota, Fiscal 1984 .................. 15 14. Estimated Tax Revenues Resulting from North Dakota State Park Visitors' Expenditures, by Park, Fiscal 1984 . .. 16 15. Estimated Secondary Employment for Selected Economic Sectors, Resulting from State Park Visitors' Expenditures, by Park, North Dakota, Fiscal 1984 . ............... .. .17 16. Total Economic Impacts Accruing to the State of North Dakota as a Result of State Park Operation-and-Maintenance, and State Park Visitors' Expenditures, by Park, North Dakota, Fiscal 1984 . 18 LIST OF FIGURES No. Page 1. Location of North Dakota State Parks, 1983 . 2 ii HIGHLIGHTS A self-administered questionnaire returned by 1,302 state park visitors in North Dakota between July 1983 and June 1984 provided the data to estimate the contribution of state parks to the state's economy. The economic impacts of operation-and-maintenanceexpenditures for state parks also were estimated. Expenditures by state parks and state park visitors were estimated at nearly $35 million in fiscal 1984. These expenditures resulted in estimated employment for over 1,800 North Dakota residents and personal income of nearly $18 million. State park and state park visitors' expenditure patterns resulted in business activity estimated at over $78 million. Tax revenues accruing to the state as a result of these expenditures were estimated at over $1.6 million for fiscal 1984. iii ECONOMIC CONTRIBUTION OF STATE PARKS TO THE NORTH DAKOTA ECONOMY John F. Mittleider and Jay A. Leitch* Tourism has grown to the third largest industry in North Dakota, generating $229 million in new wealth in 1983.1 North Dakota tourism is expected to continue a growth trend, creating employment and income opportunities for residents and tax receipts for the state. An important component of North Dakota's tourism industry is state parks, which were visited by 1,029,070 persons in 1983 compared with 394,000 visitors in 1971--an average annual increase of 13 percent (Table 1). TABLE 1. ESTIMATED ANNUAL NORTH DAKOTA STATE PARK VISITORS, 1971-1983 Year Number of Visitors 197.1 394,309 1972 347,855 1973 a 1974 773,749 1975 808,144 1976 937,953 1977 950,317 1978 1,094,960 1979 884,131 1980 919,176 1981 948,210 1982 975,416 1983 1,029,070 aNot available. SOURCE: North Dakota Parks and Recreation Department, Bismarck, North Dakota. North Dakota began establishing state parks in 1921 under the administrative jurisdiction of the State Historical Society. 2 In 1965 the *Mittleider is Research Associate and Leitch is Assistant Professor, Department of Agricultural Economics, North Dakota State University, Fargo. 1 Greater North Dakota Association, Preliminary Estimate, North Dakota Chamber of Commerce, Fargo, North Dakota, September 1984. 2 Wirth Associates and Mountain West Associates, Technical Report North Dakota State Parks System Plan, Billings, Montana, 1980. -2- legislature created the North Dakota Park Service (renamed in 1977 to North Dakota Parks and Recreation Department) which became responsible for their operations. Fifteen state parks are now in operation in North Dakota (Figure 1). Doyle Memorial and Streeter Memorial State Parks are under the auspices of Beaver Lake State Park, while Butte View and Sully Creek are under Fort Lincoln State Park supervision. Little Missouri Bay is under the auspices of Lake Sakakawea State Park, and the Devils Lake access area is supervised by Turtle River State Park. o City * State Park (year established in parenthesis) A State Park - Limited Development Figure 1. North Dakota State Parks, 1983 Purpose of Study The purpose of this study was to estimate the impact state parks have on North Dakota's economy. Economic activities attributable to the existence of the park system include employment, personal income, business volume, and several sources of tax revenues such as sales and use, personal income, and corporate income taxes. Data and information for the study were supplied by the North Dakota Parks and Recreation Department and state park visitors. Collection of data was initiated in July 1983 and completed in July 1984. Direct economic impacts of the state park system include employment and income for state residents. Economic impacts also result from the park system's purchase of goods and services from other segments of North Dakota's economy. - 3- Additionally, secondary (indirect and induced) economic impacts result when the park system's expenditures are recirculated within the local economy in the form of wages and salaries and purchases of goods and services. Secondary impacts as a result of expenditures by the park system and by the parks' visitors also include increased employment and income for North Dakotans. In addition, the state receives tax revenue through the indirect and induced rounds of respending. Thus, the total contribution of North Dakota's state parks to the state's economy is the combination of both direct and secondary (indirect and induced) expenditures by the park system and parks' visitors. 3 Analytical Procedures Economic impacts of North Dakota's state parks were analyzed on a statewide basis for fiscal year 1984 (July 1, 1983 to June 30, 1984). Impacts were divided into two categories: the direct and secondary impacts of park operation-and-maintenance expenditure patterns and the direct and secondary impacts of park visitors' expenditures. Expenditures, total business activity, personal income, taxes, and employment were calculated to estimate the total economic contribution of the state park system to North Dakota's economy. A